M&A Involving West Midlands-Based Manufacturers Falls By 80%

A new study has revealed that despite a significant fall in manufacturing M&A activity involving West Midlands-based companies in the most recent three month period, the region’s national share of sector deals remains the second highest in England.

Analysis by national law firm Irwin Mitchell of data provided by Experian, the global information service* has also highlighted that the number of manufacturing deals involving West Midlands-based companies in the first half of the year is currently 22% lower than the number of deals recorded during the same period last year.

The region’s share of manufacturing M&A activity across England stood at 12%. Although this was lower than last year, it was in line with its performance in 2011 and 2013 and higher than 2008, 2009 and 2010.

The West Midland’s share was second only to London and the South East where the figure stood at 45%. Across the East Midlands, the figure stands at just 8.3%.

Although there was a reduced number of manufacturing deals in the region where the source of finance was private equity, almost one in 10 sector deals involving local companies had PE-backing. This was higher than in Yorkshire, the North West, the East Midlands, the North East and the East of England.

Expert Opinion

“These figures reveal a mixed picture for the region as although it has seen a fall in deal numbers, its share of deals in the sector is higher than all other regions in England, except London and the South East.

“There are signs of improvement though and although the overall manufacturing sector is facing numerous challenges, there are plenty of sub sectors that are booming and I expect that this will fuel greater M&A over the coming months. Our deal pipeline looks strong for the rest of 2015 and I remain optimistic.”

Nick Dawson, Partner

Across England as a whole, only nine per cent of manufacturing deals completed during the six months of 2015 were financed through private equity – the lowest proportion since 2012.

The latest statistics in the West Midlands follow a disappointing set of output figures for the sector. Announced at the beginning of July, official figures from the Office for National Statistics (ONS) show that production levels in the manufacturing sector fell for the second month in a row in May.

ONS said output fell by 0.6% following a decline of 0.4% in April. Manufacturing in the three months to May was 4.6% below its level at the start of the recession in 2008.

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